18. In a perfectly competitive market that is characterized by free entry and ex

Question

18. In a perfectly competitive market that is characterized by free entry and exit, a. b. c. d. all firms will operate at efficient scale in the short run. all firms will operate at efficient scale in the long run. the price of the product will differ across firms. the number of sellers in the market will steadily decrease over time. 19. Natural barriers to entry in an industry include a. economies of scale. b. government regulations. c. horizontal integration d. vertical integration. When a company a. covert collusion. b. overt collusion. c. horizontal integration. d. vertical integration. 20. merges with or takes over a company that produces the same product, this represents

Explanation / Answer

Answer.)

Q18.) b.) all firms will operate at efficient scale in the long run.

In the long-run economic profits are always zero since there is free entry/exit in a perfectly competitive market.

Q19.) a.) economies of scale

A natural monopoly arises when economies of scale persist over a large enough range of output that if one firm supplies the entire market, no other firm can enter without facing a cost disadvantage.

Q20.) c.) Horizontal integration

Horizontal integration involves the combination of two business operating in the same industry and at the same stage of the supply chain.

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